Beyond the Welfare State: John Rawls’s Radical Vision for a Better America

October 28, 2012

Boston Review:

Fundamental issues of political philosophy usually lurk in the background of electoral politics, but some contests push these issues into the light. Mitt Romney’s selection of Paul Ryan as his running mate, and Romney’s criticisms of “the 47 percent” of Americans who owe no federal income tax, have raised basic questions of social and economic justice for the 2012 election.

The GOP ticket has initiated a full-blown attack on the tenets of the welfare state. Romney calls for lowering corporate tax rates and individual tax rates, for making the Bush-era tax cuts on the rich permanent, abolishing estate taxes, repealing Obama’s health insurance plan, turning Medicaid into a block grant with a spending cap, and scaling back most other forms of discretionary domestic spending, with the aim of capping federal spending at 20 percent of GDP. The Romney-Ryan ticket claims this approach will reduce the long-term federal deficit, but the agenda is philosophically principled rather than merely pragmatic: Romney and Ryan oppose the very idea that the federal government should be used as an instrument to reduce inequalities and ameliorate human suffering resulting from the free market.

But, as the “47 percent” comment showed, more is involved here than old-fashioned stinginess. Romney and Ryan have embraced the more assertive right-wing view that those who earn the most money are the truly productive, independent people in society, and that anyone who benefits from government spending is sponging off the labor of others.

In the face of this assault on equal opportunity and common obligation, liberals from Barack Obama on down must explain why an energetic government, dedicated to promoting equality of opportunity and dulling the harshness of the market, is a basic requirement for a stable, free society.

Here liberals have long drawn inspiration from the great American political philosopher John Rawls and his conception of justice as fairness. His argument, originally codified in his 1971 magnum opus A Theory of Justice and then further developed in his later writings, was that a just society would need to satisfy two principles. First, it would need to guarantee equal basic liberties to all; second, it would need to ensure that socioeconomic inequality operates to the maximum advantage of the least well off (the difference principle) and that there is fair equality of opportunity in competition for jobs and offices. Rawls’s two principles, taken together, provide a benchmark for measuring the fairness of existing arrangements.

However, to treat Rawls simply as a defender of Democratic Party liberalism and the welfare state—as he is widely regarded—is to misread him. Rawls’s critique of contemporary capitalism—and the condition of democratic practice within American capitalism—runs much deeper. As he made especially clear in his late writings, he did not think that welfare-state capitalism could realize his theory of justice. The architecture of welfare-state capitalism, Rawls felt, enthroned the disproportionate political power of the rich and militated against a shared sense among citizens that they are bound in a common enterprise, which operates in accordance with fair rules and respects the basic interests of all.

Rawls argued that in a just society the political economy must be organized with an explicit aim of either sharing or else widely distributing wealth and capital. The sharing option corresponds to what Rawls termed “liberal socialism”: schemes of market socialism in which the bulk of capital is collectively owned, by one arrangement or another. The widely distributing option corresponds to “property-owning democracy”: a political-economic system aimed at distributing wealth and capital as widely as possible among citizens, while keeping it for the most part privately held.

Rawls believed that only these two forms of political economy—liberal socialism and property-owning democracy—could prevent the domination of democratic systems by elites possessing excessive wealth and economic power. In choosing between these two possible routes to justice, he thought that we should consider questions of culture, history, and political plausibility. In the United States, with its particular history and political traditions, property-owning democracy is the more plausible option.

Rawls’s ideal models must in practice admit considerable nuance. The dichotomy between socializing capital and widely distributing it while preserving private control is rejected by most recent writings on property-owning democracy. Instead, property-owning democracy, in practical terms, is a type of mixed economy, featuring a blend of collective and individual ownership. Likewise, the dichotomy between property-owning democracy and the welfare state should not be overblown. Fully developed property-owning democracies, such as traditional welfare states, require familiar features such as universal health care, unemployment insurance, income support for the poor, subsidies for child care, and high-quality public education.1

Even at their best, welfare-state programs do not treat the root causes of our political malaise.

What should be clear, however, is that Rawls’s endorsement of property-owning democracy represents a radical break with the New Deal liberalism with which he is commonly identified. If he were alive today, though he would find the Romney-Ryan platform abhorrent, he would also be sorely disappointed with the failure of the Democratic Party to present a compelling alternative. The American public in 2012 is being presented with a choice between a representative of the super-rich who has chosen to ally himself with radical right-wing conservatism, and an incumbent president whom labor activists Carl Davidson and Bill Fletcher label, somewhat generously, a “corporate liberal.”

A careful reading of Rawls, in short, leads us away from both mainstream political parties and American welfare-state capitalism, and towards building an entirely different society.

Inequality of basic liberties

Rawls’s radicalism lies in his diagnosis of the injustice of American society. He held that inadequate social support for the poor was not the cause but merely a symptom—albeit a crucial one—of structural injustices inherent in American-style capitalism. Thus, even at their best, welfare-state programs do not treat the root causes of our political malaise.

Rawls’s critique of the U.S. political economy had a number of key components. The first is the most obvious: the use of money to influence political campaigns—both electoral campaigns and issue-based campaigns. Rawls would be appalled at the vast amounts of money being spent by corporate interests and the super-rich, constrained only by the requirement that such spending not be formally coordinated with the presidential campaigns themselves.

This political climate springs from the Supreme Court’s 2010 Citizens United ruling that rolled back even the modest limits on corporate political speech that governed previous elections. A large amount of this wealth is being invested in dislodging Barack Obama from the White House. However, the problem is ultimately bipartisan. The dependence of both parties on financial elites makes it unlikely that lawmakers will pursue reforms perceived as antagonistic to the interests of capital in general and the financial sector in particular…

Read it all.

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